Renault mulls plans to split off electric-vehicle business
17 May 2022
Renault is considering splitting its electric-vehicle (EV) activities from its internal-combustion engine (ICE) operations. This move could help the company boost its competitive position.
The French manufacturer said it was exploring options to create an EV and software entity in France, which could have 10,000 employees by 2023. Its ICE and hybrid activities would be bundled together through its main business outside France.
Renault has bold electromobility targets in Europe, aiming to be a 100% EV brand for passenger cars by the end of the decade – five years before the EU aims to phase out ICE vehicles.
EV business and IPO
To speed up the EV transition, Renault said it had ‘made the strategic choice to base the production of the main components in the electric-mobility value chain in France, which illustrates its determination to develop high-tech activities in high-potential markets and to position itself as the leader in electric cars in Europe.’
Splitting off its EV business could include a possible public listing of the unit.
A Renault spokesperson told Autovista24 that ‘all options are on the table’, but the carmaker has not decided whether separating its EV business would include an initial public offering (IPO). More details will emerge on Renault’s market day in the autumn. However, the carmaker is ‘studying all business options’ when it comes to a stock listing, the spokesperson said.
ICE and hybrid operations
While the EU is looking to effectively ban ICE vehicles in the next decade, other international markets will continue to see demand for cars powered by fossil fuels. So, Renault is considering combining its ICE, hybrid engine and transmission activities based outside France within a dedicated entity.
‘Renault Group is convinced that thermal hybrid and plug-in hybrid vehicles have significant long-term prospects and outlets in Europe and on international markets, and that its technologies, such as E-Tech, represent real growth levers,’ the carmaker said. ‘By bringing together its activities and technologies related to thermal and hybrid engines and transmissions, Renault Group aims to strengthen the potential of its technologies but also to contribute to the development of low-emission fuels.’
The manufacturer operates powertrain plants in Spain, Portugal, Turkey, Romania, Brazil, Chile, and Argentina. Similar to its EV unit, the division dedicated to ICE and hybrid technologies would have 10,000 employees outside France by 2023.
The plans are part of the carmaker’s wider ‘Renaulution’ strategic plan, which the company announced at the start of the year and includes a review of its EV and ICE activities. Renault said this would help improve efficiency and performance, with the aim to develop each unit based on their individual strengths.
Ford is pursuing similar plans. The US carmaker wants to create distinct EV and ICE units to compete against EV players such as Tesla and other traditional manufacturers, which are also upping their electrification targets. Renault’s move to separate its EV division could help the company unlock the full value of its unit while fast-tracking growth in the buoyant EV market.